Tax Measures Under Canada’s COVID-19 Economic Response Plan

Income Support for Individuals

The Response Plan contains measures to boost assistance to low- and modest-income families through $7.5 billion of additional payments which will be made under existing benefit programs as follows:

  • A one-time special payment of a GST/HST credit was paid on April 9, doubling the maximum GST/HST credit for qualifying households for the 2019-2020 benefit year.
  • The Canada Child Benefit (“CCB”) will be increased[54] in July for the 2020-2021 benefit year. The maximum monthly benefit will increase to $6,765 per child under the age of six and to $5,708 per child aged 6 to 17. This is in addition to the one-time additional $300 per child qualified CCB recipients received with their May 2020 payment as part of the Government’s response to COVID-19.

Beginning in October[55], the CRA will conduct benefits validation reviews. Individuals that have not filed their 2019 tax returns should do so as soon as possible to avoid any future interruptions to CCB and/or GST/HST credit payments. Once 2019 tax returns are filed and assessed, such payments will be reinstated.

In recognition of the volatility in stock market conditions, the Response Plan also includes a measure to reduce required minimum withdrawals from Registered Retirement Income Funds (“RRIFs”) by 25% for 2020, to provide flexibility to annuitants who might otherwise be forced to liquidate investments to meet minimum RRIF withdrawal requirements. The Response Plan also notes that similar rules will apply to individuals who are receiving variable benefit payments under defined contribution registered pension plans.

While the Response Plan contemplates expanding the tools that the Canada Mortgage and Housing Corporation (the “CMHC”) and other mortgage insurers offer to lenders to increase flexibility for homeowners to defer mortgage payments on CMHC-insured mortgage loans, there is no suggestion that the Government of Canada intends to introduce measures to defer repayments of amounts withdrawn from registered retirement savings plans under the homebuyers’ plan.

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